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Culture and Leadership in Hong Kong

Irene Hau-siu Chow
The Chinese University of Hong Kong

Hong Kong was known to the world as “pearl of the orient.” Now it repositions itself as “Asia's world city” and a gateway to China. Hong Kong is a major hub of Asia and is one of the world's largest trading economies. This tiny city plays an important role in the global market. Over the past two decades, the Hong Kong economy has tripled with per capita gross domestic product (GDP) more than doubling. Over 60% of the FORTUNE Global 500 companies have a presence in Hong Kong. One of the critical success factors was the founder's paternalistic leadership style and risk-taking behavior. Hong Kong has been under British rule for 150 years and on July 1, 1997, it was returned to China. What makes Hong Kong unique is the combination of Chinese culture and British bureaucracy.

Culture plays a strong influence in organizational practices and leadership behaviors. Hofstede and Bond (1988) suggest that differences in power distance and individualism determine the type of leadership most likely to be effective and differences in uncertainty avoidance affect people's motivation. Leadership perceptions in a society are unique and to a certain extent very likely to be influenced by culture and other contextual variables, such as beliefs, values, and needs as well as political, and socialcultural factors. The leadership perceptions associated with the GLOBE factors differed in ways that could be better understood within specific social and cultural environments.

The purpose of this study aims to identify the unique societal and organizational cultures and leadership perceptions quantitatively and qualitatively by using both qualitative and quantitative measures. This chapter begins with a historical overview, as well as the economic, political, and sociocultural background. It describes unique aspects of the Hong Kong culture and provides a better understanding of how culture influences organizational and leadership practices. In the following section, the societal culture, Confucian philosophy, and the political and economic systems that may have significant effects on values of Hong Kong Chinese managers are described. Included in the study are survey results from 171 middle managers from two industries, telecommunications and financial services. Next, the organizational culture of the two industries is examined. Cultural practices at the organizational level are compared with the societal culture. Following this, the leadership perceptions in Hong Kong are explored. The quantitative data relevant to these cultures are interpreted in relation to the qualitative findings and both theoretical and practical implication are discussed. The chapter concludes with a summary of findings and their implications and future research directions are provided.

1.  HISTORICAL OVERVIEW OF THE SOCIETY AND CULTURE IN HONG KONG

As a result of Opium War in 1839, the British seized the deserted rocky island of Hong Kong. The tip of Kowloon was ceded in 1860 under the Convention of Peking. In 1898, the New Territories were ceded under a 99-year lease. China refused to recognize any of the three unequal treaties regarding Hong Kong and insisted on its full return. After the lease ended, Hong Kong was reverted back to China. It was the first-ever return of a prosperous, free-market economy to communist rule.

Hong Kong is located in southern mainland China and is largely populated by Cantonese from Guangdong province who adhere to tradition cultural patterns. The total land area covers 1,078 sq. km., with a population of 6.8 million. It was under British rule for 150 years so its political, educational, and legal systems, to a certain extent, reflect the British influence. Long before the reunification with China, Hong Kong was well integrated with China economically.

On July 1, 1997, Hong Kong was returned to China under the “one country, two systems” principle. Hong Kong could retain its own economic, legal, and social systems that were drastically different from Communist China. The concept of “Hong Kong people ruling Hong Kong” with a high degree of autonomy assured the Hong Kong people that China would not interfere the territory's domestic affairs or seek to change its lifestyle. Hong Kong's success was attributed to an independent judiciary, a free system of press, creativity of its people, and the entrepreneurial spirit (Davies, 1996). The rapid economic development in Hong Kong and Taiwan has been attributed to the entrepreneurial spirit of the founders of many small and medium-size firms (Redding, 1990). These enterprises were flexible in adapting to the fast-changing environments. One of the critical success factors for performance was the founder's paternalistic leadership style and risk-taking behavior.

Economic and Political Background

Economic transformations of Hong Kong in the past few decades have greatly been influenced by political and economic developments in the mainland China. Starting from the 1950s, Hong Kong experienced rapid economic growth and developed a labor-intensive manufacturing industry dominated by textiles and electronics. The Hong Kong economy has gone through another dramatic structural change following China's decision to embark on economic reforms and open up to trading in 1979. Manufacturers in Hong Kong took advantage of China's open-door policies by relocating to the mainland. By shifting their labor-intensive manufacturing processes across the border, Hong Kong manufacturers were able to keep their production costs down and their products very price competitive in international markets. At the same time it offered great opportunities for expansion of production and outsourcing capacity. Since the 1980s, Hong Kong has transformed into a service economy and financial center, capitalizing on its vital links with offshore production and the rapid economic growth in the mainland. Eighty-four percent of the workforce was engaged in the service sector, employing nine times as many workers as manufacturing sector. At the macro level, Hong Kong had the highest per capita GDP but in the last few years recorded the lowest economic growth among the Chinese societies, that is, Singapore, Taiwan, and China. GDP per capita in 1997 was U.S.$26,610. Hong Kong is the freest economy in the world, according to the Heritage Foundation. In terms of world competitiveness, Hong Kong ranked third, just after United States and Singapore, but ahead of Taiwan and China (International Institute for Management Development [IMD], 1998).

The economic development of Hong Kong was spectacular, measured in material terms. In 1960, the average per capita income was 28% of that in Great Britain; by 1996, it had risen to 137% of that in Britain (Information Service Department, Hong Kong Government, 1997). Now Hong Kong is a major hub of Asia—it is the world's 10th-largest trading economy (equivalent to about a fifth of China's GDP), the fifth-largest banking center and foreign-exchange market, and the busiest container port. Foreign investments in Hong Kong total around $100 billion. It is a remarkable success story. The economic miracle took place in just the last three decades. Within a generation the average living standards rose from Third World levels to levels exceeding those in some of the Western European countries, including the UK. After 5 years under the Chinese rule, the rosy economic environment has changed.

During China's modernization process, Hong Kong acted as a major source of management expertise and business skills. Starting from the mid-1980s, over 52,000 Hong Kong residents were working in China, most of them professionals and managerial staff. They brought in experience and expertise regarding business operation in mainland and thereby helped Hong Kong to establish close relations with the mainland. At the same time, about the same number of people from the mainland worked in China-funded companies in Hong Kong. In the late 1980s and early 1990s, about 1% of the Hong Kong professional and experienced businesspeople left Hong Kong and immigrated to other countries because of the anxiety about Hong Kong's reversion to China. The emerging dynamic economies and growth potential attracted a large number of overseas Chinese businesspeople to return to Hong Kong to take the advantage of the opportunities. These returnees contributed positively with a broader international perspective. The influx of professionals from outside Hong Kong served Hong Kong well, boosting its efficiency and economic vitality.

The Basic Law has granted Hong Kong residents the freedom of religion. The church provides a high percentage of health care (20%), education (40%), and social welfare (60%) in Hong Kong (Kwok, 2000, p. 102). In education, the Roman Catholic Church is running all kinds of schools including kindergartens, primary and high schools, and adult education.

On the political side, Hong Kong was described as “undemocratic and unrepresentative, executive led, and based on a colonial form of constitution.” The last governor, Chris Patten, brought in political reforms. It was criticized as too little too late by the democratic, and condemned by the Chinese government. The legislature was elected under the democratic reform of Patten, and Beijing ordered it to be disbanded as of July 1, 1997, replacing it with a Provisional Legislature that would rubber-stamp China's dictates. After the handover, the Legislative Council was immediately replaced by the Provisional Legislative Council. Elections in May 1998 were far more restricted, with 20 directly elected legislators (one third) representing geographic constituencies. Several provisions of the British-introduced Bill of Rights were scrapped. The reinterpretation of the basic law concerning the right of abode ruling for mainland-born children of Hong Kong permanent residence and the legislation of the controversial Article 23 that prohibits succession, subversion, and the theft of state secrets, undermined the society's confidence in the legal system. The majority of the Hong Kong people are willing to sacrifice their political participation in order to retain economic vitality. Even if Hong Kong were to become like Shenzhen in terms of freedom, human rights, and legal systems, the people would still be expected to consider it tolerable.

The sentiment toward China's 1997 embrace is much more ambiguous and complex. It is a mixture of happiness over Britain's departure and anxiety over what could happen under Chinese rulers who ordered the army attack on Beijing in 1989. After the handover, there has been little sign of direct interfering from the central government in Beijing with the day-to-day running of the Special Administrative Region (SAR). The key members of the government under British rule were retained after 1997, in an effort to bolster confidence about Hong Kong's future autonomy in the run-up of the handover. The conditions largely remain unchanged in the initial posthandover period. After the territory reverted to Chinese sovereignty, the political and economic environments were expected to deteriorate, with a forecast that the business environment score would fall from 8.71 for 1994–1998 to 8.24 for 1999–2003 (Economist Intelligence Unit, 1998). China's resumption of sovereignty over the territory would have an adverse affect on both political stability and effectiveness. The economic downturn, together with the legitimacy deficiency of the government is likely to reduce political effectiveness. The regional economic problem has worsened the macroeconomic environment and the city's competitive edge continues to erode. Hong Kong has lost its top position on the global ranking, falling to 12th among the 60 countries covered by the EIU's Country Forecasts. However, Hong Kong will remain to be an outward-looking, international city.

During the 5 years under Chinese rule, Hong Kong suffered from both internal economic structuring and the external Asian financial crisis that resulted in a region economic downturn. The trade-dependent Hong Kong was severely hit and ran into recession in 1998, one of the worst recessions and the most difficult times. When the Internet era faded, the economy went into recession again. Hong Kong has encountered a double-dip recession within the last 4 years. Unemployment rose to 7.8% in mid-2002 and further up to 8.7% after the hard hit by the Severe Acute Respiratory Syndrome (SARS) crisis on the economy. Hong Kong has been experiencing mild deflation for 4 consecutive years. The consumer price index dropped a total of 13% during the same period. The average GDP recorded a negative figure (–0.2%) from 1997 to 2001. The prolonged adjustment period created a sense of frustration and pessimism among the people in Hong Kong. A survey conducted by the Hong Kong General Chamber of Commerce revealed concerns looming over the city's economic competitiveness and frustration with the local government. Their worries ranged from high property and labor costs to declining educational standards and air pollution (Wonacott, 2000).

Despite of all this, Hong Kong is still considered as one of the best business hubs in Asia. Hong Kong's business environment is relatively attractive because of its low tax rates, a stable political environment, the absence of trade barriers, and exchange controls.

2.  SOCIETAL CULTURE OF HONG KONG

Confucian and Chinese Culture

Hong Kong is a place where the East meets the West. It offers a cosmopolitan culture that reflects the native Chinese culture and the British colonial influence. The Hong Kong people have adopted Western ideas in order to achieve commercial success. Despite the strong British influence, Hong Kong still keeps much of its Chinese cultural tradition. The emphasis placed on certain Confucian values, such as filial piety and harmony, may reflect the lingering influence of traditional Chinese culture. The governors were all British, and all of them were appointed at the Crown's will. The British national flag and portrait of the Queen of England were over most of the government buildings. Yet the majority of the people of Chinese descent in Hong Kong do not identify with the British. A century and half of British presence have left remarkably little impression on the Chinese population of Hong Kong, who never identified with the colonial rulers. Although living under a colonial regime and experiencing low social and political participation, the majority of the Hong Kong people identify themselves as “Hongkongese” rather than Chinese. They are proud of their identity and maintain a sense of belonging to Hong Kong. Over half of the population came from China and settled for quick money. Living “on borrowed time, in borrowed place” (Hughes, 1968), people in Hong Kong tend to develop a very short-term orientation, with a preference for short-term measures and quick profit.

The Chinese have historically been dominated by respect for a hierarchy of authority, which can be traced back to the Confucian value of loyalty between sovereign and ministry (Von Glinow & Teagarden, 1988). Chinese cultural traits attributable to an upbringing in the Confucian tradition are: (a) socialization within the family, (b) a tendency to help the group, (c) a sense of hierarchy, and (d) a sense of complementary relations (Kahn, 1979). Confucianism is a Chinese social philosophy and set of moral guidelines. Confucian values emphasize the importance of education, obedience to authority, interpersonal harmony, loyalty to the family, kinship affiliation, and individual responsibility (Hofstede & Bond, 1988; Yeh, 1989). When there is conflict between loyalty and filial piety, the Chinese tend to show loyalty only to the family. The deeply rooted cultural values of Confucianism still guide individual actions and attitudes (Adler, Docktor, & Redding, 1986; Shenkar & Ronen, 1987; Tung, 1981). Hong Kong residents have been brought up with the virtues of Chinese culture as well as the instinctively Chinese values such as humility, patience, persistence, and working hard. They also appreciate the Western traits such as creativity, aggressiveness, and directness that often get things done. Hong Kong people are pragmatic enough to preserve the virtues of Chinese culture while at the same time assimilating the knowledge and experiences of the West.

The people of Hong Kong have long lacked a common identity. Over half of the population has successfully escaped the communist rule and settled in Hong Kong with a refugee mentality. The recent new immigrants or new arrivals from mainland are in a poor economic situation and in need of financial assistance to integrate into the community. Some better-off people migrated to foreign countries, mainly Canada and Australia, to secure a foreign passport and then returned to Hong Kong. These overseas returnees have evolved into a curious hybrid of Eastern and Western culture with a different identity.

Others may not consider Hong Kong as their permanent home. Living in a “borrowed place, borrowed time,” there is a limited sense of belonging. Facing the identity crisis, the chief executive, Tung Chee-hwa, shared his vision in governing Hong Kong in the following way:

3.  METHODOLOGY

In this study, both qualitative and quantitative methods were used to collect the data. Three themes were addressed by the GLOBE questionnaire (House et al., 1999, 2004): (a) perceptions about effective leadership, (b) societal cultural practices and values as perceived (“As Is”) and as desired (“Should Be”), and (c) organizational cultural practices and values as perceived (“As Is”) and as desired (“Should Be”). The sample of respondents comprises altogether N = 171 middle managers in the telecommunications and financial services sectors. The sample characteristics are described in Table 25.1.

TABLE 25.1
Sample Characteristics

Sample Size: N = 171	Mean	Std.Dev.
Age	35.67	9.06
Years of formal education	17.54	13.09
Years staying in Hong Kong	31.64	12.32
Years of full-time work experience	14.11	11.36
Years as manager	9.96	21.47
Years with current employer	7.98	9.61
Gender	Male n = 102 (60%)	Female n = 6 9 (40%)
Work for an MNC	Yes n = 92 (54%)	No n = 79 (46%)
Member of a professional association	Yes n = 31 (18%)	No n = 139 (82%)

The qualitative research methods include interviews, unobtrusive measures, and content analysis of narratives, for example, media, literature, and archival records. These methods provide a rich description of the specific societal culture and leadership perceptions that are endorsed in Hong Kong. The culture-specific characteristics are also discussed in terms of how they influence leadership perceptions.

Results of the Quantitative Study of Societal Culture in Hong Kong

Results of the quantitative analysis are presented in Table 25.2. It contains Hong Kong's country score (mean score of all respondents) and its ranking among the 61 countries that participated in the GLOBE research program for the nine societal culture “As Is” and “Should Be” scales. The highest mean scores obtained by Hong Kong were on In-Group Collectivism (5.32) and Power Distance (4.96), followed by Performance Orientation (4.80). Relatively low scores were measured for Humane Orientation (3.90) and Future Orientation (4. 03) at the society level. A comparatively low score for Institutional Collectivism indicates that Hong Kong is individualistic in its societal culture. When comparing the within-country scores of In-Group Collectivism (5.32) and Institutional Collectivism (4.13) a discrepancy becomes apparent. It seems to reflect that Hong Kong Chinese individuals are more collectively oriented to their family but they are more individualistic oriented within their society. Despite the importance that Hong Kong Chinese respondents placed on family cohesiveness, the score is significantly lower than that of other Chinese communities (e.g., 4.77 for China, 4.59 for Taiwan).

It is worth noting that Hong Kong society ranked 3rd in Performance Orientation, 5th in Assertiveness, and 28th in Gender Egalitarianism among the 61 GLOBE countries and regions included in the study.

TABLE 25.2
Results of the Nine GLOBE Cultural Dimensions at the Societal Level

^a7-point Likert scale. ^bThe rank order is relative to the 61 GLOBE countries.

Value or “Should Be” items describe the respondent's perception of what people claim to want or desire for themselves. For the “Should Be” score, there appears to be a clear preference for higher level of Performance Orientation (5.64), and Future Orientation (5.50), followed by Humane Orientation (5.32). It should be noted that all of the “Should Be” scores were higher than the “As Is” scores, with the exception of Power Distance. In fact, Power Distance was the lowest (3.24) in the nine “Should Be” dimensions. This indicates that the Chinese respondents desire to have a lower power distance society. In comparing the “As Is” scores with “Should Be” scores, there were significant differences. In general, the “Should Be” scores are higher than the “As Is” scores in most of the cultural dimensions, except for Power Distance. This may reflect the social desirability, or something people want to have. The discrepancies between the “As Is” and “Should Be” scores can be interpreted to indicate the desired direction for societal change.

Hong Kong ranked third in Performance Orientation (“As Is”), however the respective “Should Be” ranking dropped tremendously to 52. Conversely, Power Distance “As Is” (4.96) ranks 43rd and Power Distance “Should Be” (3.24) ranks 5th highest among the 61 GLOBE countries.

Other scales that attract attention are Gender Egalitarianism and Humane Orientation. A moderate level of Gender Egalitarianism “As Is” (3.47) is evident and the respective “Should Be” score indicates a desire for higher levels of Gender Egalitarianism (4.33). The Hong Kong society is not considered as a very humane society as indicated by a low-ranked “As Is” Humane Orientation score (3.90, Rank 41). In line with the worldwide trend, the respective “Should Be” score is considerably higher (5.32, Rank 38), which makes it a desirable cultural value in Hong Kong's society. A similar trend is apparent for Future Orientation “As Is” (4.03, Rank 21) and “Should Be” (5.50, Rank 33). Interestingly, In-Group Collectivism, which received the highest “As Is” from middle managers in Hong Kong, received a much lower “Should Be” score (5.11), which positions Hong Kong among the lower end of all 61 GLOBE countries (Rank 57). The high ratings for Assertiveness remained about the same for both dimensions, “As Is” (4.67, Rank 5) and “Should Be” (4.81, Rank 5).

Results of the Qualitative Study of Societal Culture of Hong Kong

This section describes the Hong Kong societal culture based on unobtrusive indicators and archival data.

Uncertainty Avoidance. Hong Kong is characterized as a free-market capitalist economy. Being a laissez-faire economy, the government provides few tax incentives for new businesses. Unlike the economic development of Taiwan, Singapore, and South Korea, the Hong Kong government adopts the “positive nonintervention” philosophy. Such a hands-off, laissez-faire culture greatly enhances entrepreneurial activities. This can be reflected by a large proportion of entrepreneurial firms and high rate of new business start-ups. Greater industrialization also encourages individual initiatives, and Hong Kong is known for having a large number of risk-taking entrepreneurs and a general speculative attitude among its people. Hong Kong people are more speculative than other capitalistic societies and are more prone to take calculated risks. They recognize and acknowledge the significant rewards that may result from taking risks to start a new business (McGrath, MacMillan, Yang, & Tasi, 1992). Terpstra, Ralston, and Bazen (1993) found that U.S. managers and Hong Kong managers have no significant difference in risk-taking propensity. On the other hand, the relatively low expenditures for research and development and reluctance to invest in high-tech industry reflect the mentality of uncertainty avoidance. Without government subsidy, investors are simply not willing to bear the risk of failure in high-tech industry.

Power Distance. A person's influence is based primarily on one's ability and contribution to society. Hong Kong Chinese are more confined by social classes and organizational hierarchy. People in positions of power tend to increase their social distance from less powerful individuals and so power is concentrated at the top. Followers are expected to obey their leaders without questioning.

Hong Kong is a social class–conscious society and its people are endlessly chasing money. Wage differential is high with great discrepancy in wealth distributions. Every year the media identifies the wealthiest and the most powerful families in the Hong Kong. Most of them make their fortune in the property industry. These wealthy families generally have more domestic servants, luxury houses, and expensive cars. Anything that reflects class, status, and power distance is welcome. The dressing code also reflects one's status with managers tending to dress formally. Graduating students are also ranked and classified into different class of honors degree according to their academic records.

Power stratification can also be reflected in the number of hierarchical levels in a particular organization, status-relevant occupational and honary titles, and size of office. The amount of office space is generally allocated according to the status rather than the requirements of the work to be done. It is viewed as a privilege. The way people address each other in society reflects status differences. In Hong Kong, management practices in small and medium-size organizations are often based on kinship relationships and involve obedience to elders, based on deference to the wisdom of experience.

There were very few historical heroes or leaders in Hong Kong. The main streets and buildings were named after the Royal Family of England. The Royal Crest was found on most of the government buildings and post boxes before the 1997 handover. The governors were appointed by the Crown in England. Local people believed that the governor served the interest of England rather than the interest of the Hong Kong people. There is an absence of public symbols that attest to the greatness of national leaders.

Institutional Collectivism. Hofstede and others describe Hong Kong as a moderately collective-oriented society, with individuals belonging to a set of different and overlapping social networks. Contrary to Hofstede's (1980) findings two decades previously, Hong Kong society seems to be more individualistic now. In a large social survey conducted in Hong Kong, the conception of happiness is very personal and individualistic and good health and money were the major concerns. In a densely populated city-state, the majority of the people lives in crowded high-rise buildings. They are only concerned with their private life and seldom socialize with their neighbors.

In-Group Collectivism. In a family-and relationship-oriented society, in-group collectivism becomes more important. Aging parents generally live at home with their children and children live at home with their parents until they are married. Parents take pride in the accomplishments of their children.

Because of the space constraint, the prevalence of extended families is increasingly more difficult. A more affluent society can afford to have better accommodation for the nuclear family. The share of the nuclear family increased from 54% in 1981 to 63.6% in 2000. Married children with their own children will no longer live with their parents; however, they will get together for dinner at least once a week or several times a month. Members of the extended family stay nearby to offer help. It is also a common practice to have communal dishes, which are shared by all family members. It is the government policy to encourage households living with aged parents. Commitment to live and take care of aged parents will be given high priority in the allotment of government-subsidized public housing for low-income families. Despite the growing incidence of family conflicts and rise in divorce rate, survey results show that the highest satisfaction is consistently found in the domain of family life (Lee, 1992).

Gender Egalitarianism. In most Chinese societies, the traditional family remains patrimonial (absolute power is vested in the male head of the household). Male children are preferred to carry the family name. The patriarch would be the ruler and leader of the household, making all-important decisions and dictating his wishes. He would enjoy the highest status in the family, and the domestic burdens would fall on to his wife. Husbands are masters of the households and wives are expected to submit to their authority. Despite the centrality of family in Chinese societies, the importance of love and marriage is given a relatively low significance (Lee, 1992). In Hong Kong, as far as the gender aspect of family life was concerned, there was evidence of a strong departure from the male-centered gender-unequal family. The Hong Kong families were far more gender-equal than commonly assumed. In a large social survey, the majority of the respondents disagreed that “women should put family before everything else and even give up work if there is the need.” It can be argued that in Hong Kong people are pragmatic enough to see the advantage of having a second paycheck (Lee, 1992, p. 14).

In the education system, there is a tendency for male students to enroll in mathematics and the hard science, and for female students to enroll in the arts. This is quite a universal phenomenon. Requiring the female students to take courses in needlework and domestic science and male students to take courses in wood and metal work reinforces the gender roles. The gender role is also implicitly reflected in the content of textbooks in junior high school (Shamdasani, 2002). Content analysis of Chinese history textbooks in Hong Kong revealed more than 2,900 episodes on gender roles. Out of these episodes, only 99 described the female role, just 1 out of 30. In most cases, women were described as housewives, sex slaves, concubines, and so on. The female roles were seriously downgraded whereas the men were projected to have attained high levels of achievement and made significant contributions to the country. One may question that there were very limited female role models in traditional Chinese history. More recently, in a survey of integrated social studies that included more than 10,000 lines of text and more than 250 pictures, the frequency of men appearing in text and pictures compared with women was found to be more than double. The image of the man is projected to be more important and professional than the woman. Women are shown to take more responsibility related to homemaking and child caring.

In the workplace, the involvement of women in the labor force has been rising. Female labor force participation rate was 51.1% in 2001. As more and more women join the workforce, together with the equal opportunity in both the educational system and the workplace, women have a better chance to move into the managerial and professional occupations. There is a high proportion of women represented in the senior civil service and the private sector. In 1999, one third of the civil servants were female (Civil Service Personnel Statistics, 1999). In the directorate grade, 24% are female and in public office, females represented 11.5% and 16.7% in the Executive Council and Legislative Council membership, respectively (Department of Census and Statistics, Hong Kong Government, 2001).

Ngo (2000) investigated the trends in occupational segregation by gender in Hong Kong. Antidiscrimination legislation regarding women's employment has been enacted only recently. Education and job opportunities have been available for women in Hong Kong, owing largely to prosperous economic conditions; for instance, female labor force participation rate was 51.1% in 2001. In the past 15 years, the female labor force increased by 45%, compared to 14% of their male counterparts. However, women predominantly work in jobs that have lower status and lower income such as clerical (72.5%), sales, and personal services (45%). Rising levels of educational attainment qualifies young women to enter a broad range of jobs. There is an increase in women's representation in managerial/administrative (25%) and professional (32.7%) occupations (Department of Census and Statistics, Hong Kong Government, 2001).

The restructuring of the Hong Kong economy has changed occupational sex segregation due to two major forces. First, Hong Kong has undergone a process of “occupational upgrading,” which is characterized by an increased share of higher status administrative, professional occupations in the labor market. The growth of managerial and professional jobs over the last decade has facilitated women's entry into these prestigious jobs, which have been traditionally dominated by men. Second, the middle-aged, less-educated women who lost their jobs in the manufacturing sector have also possibly sought employment in low-skill service occupations. Only the skilled and craft male workers remained in their original job positions. The blue-collar occupations have become more sex segregated.

Assertiveness. It measures the extent to which a society is assertive, dominant, and tough in social relationships. A previous study by Schermerhorm and Bond (1991) found that Hong Kong Chinese are more masculine and assertive than Americans. However, the Chinese cultural concept indicated otherwise. In a society where strong emphasis is placed on harmony and face saving, confrontations are avoided. Tung Chee-hwa, the chief executive of Hong Kong Special Administrative Region, “strongly believes in greater harmony, less hostility, less unnecessary quarreling, but more rational discussion” (www.Info.gov.hk/gia/General2000/0/111011 40.htm). After all, “quiet negotiation does not mean weakness.”

Future Orientation. Chinese in general are often described to have a long-term orientation (Hofstede & Bond, 1988). Future orientation and future investments of enterprises in Hong Kong ranked number 7 and 10 respectively (IMD, 1997). As for attitudes toward the future, Hong Kong people do not have much confidence in the territory's future. A significant and expanding percentage of graduates in the professional fields, such as engineering and computer science, opt for jobs in the financial sector, or in the business field, instead of trainee posts in engineering or manufacturing industries. Young people are reluctant to engage in long-term planning and long-term investment in improving their qualifications. Living in a “borrowed time, borrowed place,” people in Hong Kong tend to focus on the short term. There is a saying that “Hong Kong is a place where you can have an idea at nine, incorporated by noon, and have your profits by six.” Investors with long-term objectives are skeptical about Hong Kong's future and tended to engage in short- or medium-term investment only. The economic downturn in the past few years further deteriorates entrepreneurs’ investment confidence.

Investment in research and development is another indicator of future orientation. Hong Kong manufacturers do not have a tradition of innovation. Many of them started their business as original-equipment manufacturers (Chua et al., 2002) and very few of them are willing to spend resources on research and development. According to a report written by researchers from Massachusetts Institute of Technology (Berger & Lester, 1997), the proportion of research and development was estimated to be 0.1% of GDP, compared with 2.4% in the United States and 2.9% in Japan. Only 1% of the total number of patents granted in Hong Kong originated from a proprietor from Hong Kong (Department of Census and Statistics, Hong Kong Government, 2003). The SAR government proposed to increase spending on research and development and upgrade technology. The infringement of intellectual-property rights in Hong Kong and China is so widespread that without proper intellectual-property protection, being innovative to improve performance is not substantially rewarded.

Performance Orientation. Hong Kong is still strong in business and was ranked third in the world in terms of competitiveness for a short period. Unfortunately, its ranking dropped to 7th in 1999, and further down to 14th in 2000. Management efficiency and entrepreneurship ranked second.

Though work is of utmost importance in life, high priority is placed on performance orientation. The support of competitiveness as indicated by working hard, tenacity, or loyalty ranked on top of the world (IMD, 2000). The average number of working hours per year was 2,500.

In a high performance- or achievement-oriented society, students are encouraged to strive for continuously improved performance. At the age of 12 students are assessed by Academic Aptitude Tests and get a secondary-school place according to the banding of 1 to 5. Students attending Band 1 schools are labeled as high achievers. The Academic Aptitude Tests were abolished and the branding was reduced to 3 to avoid a labeling effect. Good academic records are still very much emphasized. There is a strong tendency to chase credentials in the form of certificates, diplomas, and university degrees. Both parents and the government are willing to invest in human capital and education.

Hong Kong is far closer to Western-style management than most other Asian nations. People in the former British colony, with a weak political and national identity, developed a pragmatic orientation that emphasizes survival and growth by pursuing material gains. They tend to be more result and performance oriented. Hard work and good performance are always valued by employers. Hong Kong's workforce has been maintaining its efficiency and high spirits very well. They are very dedicated to their work and they derive considerable job satisfaction alongside financial rewards.

Hong Kong is a place full of opportunities with a high degree of social openness. Wealth is considered as an important criterion to determine one's social status. It is generally accepted that to become rich is glorious. The entrepreneurial spirit among the Hong Kong people has remained strong. The culture encourages people to be their own boss and entrepreneurs and those who have become wealthy by setting up businesses are respected and admired in the society. The self made billionaires, taipans, are glorified for their wealth-creating ability. Major rewards are based on performance effectiveness and the use of a formal performance appraisal system is a common practice.

Humane Orientation. Renqing, the affect and care components of the relationship (Guanxi), is particularly important in the Chinese society. Results from Chinese Culture Connection (1987) found no difference between the United States and Hong Kong on this dimension. Ralston, Gustafson, Elsass, Cheung, and Terpstra (1993) found that U.S. managers are more concerned with getting jobs done whereas the Chinese managers were more concerned with maintaining a harmonious environment.

Treatment of the poor and the less fortunate reflects the society's humane orientation. Direct government spending is about 21% of national income in Hong Kong, despite the forecasted budget deficit of HK$36.5 billion for the year 2000 (2.8% GDP). During the period of economic downturn (coupled with demands for greater social expenditure) the total public expenditure increased by 4.3%. The largest share of spending is on education (19% of the total expenditures), amounting to HK$55.2 billion, and the greatest increase in spending is on social welfare, which has risen to 13.7%. Despite all these efforts, Hong Kong residents still consider this to be not enough. Another indicator of increasing humane orientation is that human rights organizations are gaining a bigger voice and are becoming more visible in Hong Kong society. The Hong Kong –style protest (display of public indignation) is seen as tame by Western standards.

Overall Profile of Societal Culture of Hong Kong

An overall profile of the societal culture of Hong Kong based on a combination of the findings of both the quantitative and qualitative studies can be summarized as follows.

The findings of the GLOBE study presented in this chapter reflect the changes in societal culture during the last decade, particularly after Hong Kong was returned to China. The societal culture is described as high in Power Distance and Performance Orientation. In contrast, Hong Kong society is relatively low in Institutional Collectivism, Future Orientation, and Humane Orientation. One of the most striking observations is the medium to low score on In-Group Collectivism. Family business is overwhelmingly the dominant form in Hong Kong. The major characteristics of small family business are centralized, paternalistic, and nepotistic in nature that rely on personal networks for external linkage. The dependence, conformity, and Lau's (1982) depiction of “utiliarianistic familism” are the most prevailing societal values of Hong Kong. The key success factors are adaptability and flexibility in response to the rapidly changing demand of their clients and markets. The laissez-faire policy and free market provide the opportunities for entrepreneurial spirit to flourish. The people of Hong Kong are pragmatic and materialistic, with short-term orientation.

In terms of values at the societal level, it is interesting to note that Hong Kong scored lower in several cultural dimensions (Power Distance, Institutional Collectivism) than the other three Chinese societies (PRC, Taiwan, and Singapore). In contrast, Hong Kong people are more individualistic in societal cultural practices and values than citizens in other Chinese societies. In-Group Collectivism was considered as the most important cultural dimension in Hong Kong, yet the score was still lower than the other three Chinese societies. And, the Hong Kong society seems to prefer a more assertive pattern of behavior. Hong Kong women are no longer subordinated to men and confined to domestic work as in traditional Chinese society and women are more readily accepted in the business world due to Hong Kong's long exposure to the more egalitarian Western view. Hong Kong scored higher in Gender Egalitarianism than other Chinese communities (e.g., Taiwan, PRC) as indicated by a medium score in the Gender Egalitarianism scale. To a certain extent, this may be due to the prolonged Western influence. The preference for higher female orientation (high equality on the top positions, employment opportunity, education, etc.) was expressed as desirable for the future.

Hong Kong is still struggling with uncertainty and economic downturn after its return to Chinese sovereignty and it is attempting to regain its competitiveness. Emphasis should be placed on Future Orientation and Performance Orientation. It is the pervasive anxiety about the future that releases the boundless energy of the community. The anxiety also spurs self-employment and entrepreneurship. Unfortunately, there is increasing evidence on the erosion of entrepreneurial values and increasing risk aversion as well as reliance on government support. Currently Hong Kong has one of the lowest entrepreneurial participation rates in the world because of deteriorating business sentiment (Chua et al., 2002). Just like Singapore and other welfare states, Hong Kong people have fewer incentives to start a business because their basic needs are being well taken care of with subsidized public housing, an inexpensive public health system, and increased welfare spending. All these have affected their motivation to work hard to meet their own needs. Other developments of cultural and social norms, such as rising professionalism and higher living standards, are unlikely to nurture entrepreneurial spirit. Following the breakdown of the “Hong Kong economic miracle” and the difficult time encountered after its return to China, consumer confidence was relatively pessimistic about the future regarding employment, the economy, regular income, stock market performance, and quality of life. According to Master Card International's biannual survey around the Pacific region, Hong Kong's score was 21.3 based on a scale of 100, second to last in the 13 markets studied (V. Yu, 2003).

According to IMD's (2000) world competitiveness survey, Hong Kong scored 6 on a 10point (most satisfied) scale in overall life satisfaction. The average number of weekly work hours was 50, the highest, whereas job autonomy was only 2.2, the lowest among all the countries surveyed. Work was under a great deal of pressure. Satisfaction with the relationship with supervisor was 4.9, also the lowest on a 7-point scale. Subordinates do not think their superiors are weak in abilities or poor in work attitudes, but they are weak in management communication skills and too results oriented, creating too much pressure for staff. Hong Kong employees are much less satisfied with their jobs and the management practices of the firms than their European counterparts (Leung, 2002).

4.  ORGANIZATIONAL CULTURE IN HONG KONG

Organizational culture is obtained by using GLOBE questionnaires surveys from respondents in the telecommunications and financial services sectors. A brief history of both sectors in Hong Kong is provided in the Appendix. The results obtained from the GLOBE study are presented together with the societal value for comparison.

TABLE 25.3
Organizational Culture for the Telecommunications and Financial Industry

The results of organizational culture in telecommunications and financial industries are presented in Table 25.3. It should be noted that there is no significant difference between the two industries in both “As Is” and “Should Be” scores. The scores for In-Group Collectivism are the highest among all cultural dimensions in both industries. The importance of In-Group Collectivism remained high at the organizational level. Gender Egalitarianism and Humane Orientation scored around the midpoint on a 7-point scale in both industries. It implies that Gender Egalitarianism is pretty much achieved in organizations. Power Distance is also high in these two industries. It is desirable to have lower Power Distance in an organization as indicated in the way it “Should Be.” Future Orientation is not practiced as it is now but is highly desirable. Assertiveness, Institutional Collectivism, Future Orientation, Humane Orientation, and Performance Orientation all received higher scores for the way it “Should Be” than the way it is. It highlights room for improvement in these dimensions.

In terms of “As Is,” the organizational-level culture of both the telecommunications and financial sectors followed more or less the same pattern as the societal level. In general, there was a consistent pattern on these cultural dimensions on both the societal and organizational level. For example, Gender Egalitarianism received a similar score at the societal level and the organizational level. The medium scores around 3.5 at the organizational level implied a preference for gender equality. Assertiveness remained high at the organization level in both “As Is” and “Should Be” scores. Assertive behaviors are considered important in organizations. Future Orientation (“As Is”) is highly desirable but did not receive the same level of attention at the organizational level, with a lower score in both industries. Humane Orientation scored low at both the societal and organizational level. Facing the financial pressure of downsizing and salary cuts, organizations were not doing enough to take care of their employees. At the societal level, In-Group Collectivism received the highest score (5.32), and it remained very important at the organizational level, but was slightly less desirable in the telecommunications industry. Power Distance was less desirable, even more so at the organizational level than the societal level, and value placed on the way it “Should Be.” In comparison with the society-level values, the score of Uncertainty Avoidance is lower at the organizational level for both “As Is” and “Should Be.” Even though the organizations surveyed are not family-owned business, the organizational culture is characterized by family control and personal authority.

5.  LEADERSHIP IN HONG KONG

Until 1994, all the top posts in the public administration were held by British expatriates. In the private sector, top-management positions in traditional Hongs (trading houses or conglomerates) are held primarily by British and Anglo-Saxons. There is a marked difference in the culture and leadership before and after the reunification with China. Up to the 1980s, the Hong Kong business community was dominated by a few large Hongs, such as The Hong Kong Bank, Jardine, Matheson & Company, and The Swire Group. These British Hongs monopolized the market and played a leading role in the domestic economy. The operations of these Hongs have had a significant influence on culture and leadership style, the typical Western style. Since the reunification, the China-controlled firms have gained importance and started exerting more powerful influence on the Hong Kong economy. The new dominant organizations in Hong Kong are headed by Chinese taipans. It is estimated that the market value of the listed companies controlled by Chinese capital in Hong Kong amounts to about 55% of the gross value of the Hong Kong Stock Exchange (Liu, 1997, p. 136). When Patten's proposed reform was attacked by China, Hong Kong business leaders were less enthusiastic about his reforms. Some prominent businesspeople and probusiness voices endorsed the idea of “democratizing” the Legislative Council. Tycoon Li Ka-shing threatened to pull out a $10 billion project simply because he was worried about the political climate (criticism from political parties). Business leaders also complained that the business community's influence was being diluted by increasingly powerful elected politicians (South China Morning Post, December 23, 1998, p. 1), which has generated the irrepressible energy propelling Hong Kong to its economic prosperity (S. L. Wong, 1997).

Review of Prior Research and Literature on Leadership in Hong Kong

Westwood and Chan (1992) tried to distinguish leadership and headship in the Chinese context. Leadership is related to individual qualities or behaviors. The person who is the head of an organization may achieve that status through some means outside of the leader-led relationship (e.g., inheritance or ownership). Headship is viewed as being imposed on the followers. This is particularly true in the family-owned business. A Chinese businessman's headship of an enterprise will be accepted and his rights as owner will not be challenged.

Westwood and Chan's (1992) study of headship of Chinese-owned organizations found Chinese entrepreneurs to be very autocratic. They believed that their rights as owner should not be challenged. Silin (1976) argued that Chinese leaders, in order to protect their organizational status, would withhold information and power from their subordinates. Only when it was necessary would Chinese supervisors release this information and power so that subordinates would remain dependent to their leaders. Silin found that the vertical hierarchy in Chinese organizations facilitates control and did not give much room for subordinates’ initiative. Chinese supervisors also regularly played down or denied the contributions of subordinates so that their own position could be strengthened (Redding & Wong, 1986, p. 288). Coaching subordinates to encourage intellectual exploration would go against the supervisors’ wishes. Smith, Misumi, Tayeb, Paterson, and Bond (1989) studied the leadership style of Hong Kong using Misumi's PM (performance–Maintenance) leadership theory, which is parallel to Ohio State's study of initiating structure and consideration. The maintenance supervisor's distinctive behaviors include discussing a subordinate's personal difficulties, spending time together socially both at work and after hours, and talking about work problems. In addition to all these behaviors, the performance leader engages in more frequent meetings with subordinates, discussion on career plans, and communication with other work groups. The distinction between P and M is not clear-cut. The maintenance leader is best exemplified by the tactfulness employed in resolving personal difficulties in an indirect manner, whereas the performance leader encourages cooperative work behaviors.

Figure 25.1. LBDQ—Ideal leader versus Hong Kong manager.

Selmer (1996) studied Hong Kong managers using the Leadership Behavior Description Questionnaire (LBDQ–XII). The ideal leader is expected by subordinates to be high on “prediction accuracy,” and “integration,” low on “tolerance of uncertainty,” “role assumption,” and “production emphasis.” The scores for the ideal leader are consistently higher than actual Hong Kong managers in all 12 leadership behavior factors. In another study, Black and Porter (1991) found none of the 12 dimensions of managerial behaviors were related to performance as measured by the LBDQ among Hong Kong Chinese managers. The comparison of results from these two studies is provided in Figure 25.1. It should be noted that Black and Porter's study recorded consistently lower scores on these factors except for “tolerance of uncertainty” and “consideration.”

Okechuku and Man (1991) compared the managerial traits in Canada and Hong Kong and concluded that the role of manager in the Hong Kong context is different from Canada as power concentration reduces discretion and increases dependence. Compliance inhibits initiatives from subordinates. From a Confucian perspective, a leader should be a morally superior person and should behave in ways that conform to the key virtues of consideration and humanheartedness and should follow the rules of propriety. Relationships may be unequal but they are also reciprocal and contain mutual obligations. Owner managers expect loyalty and obedience from their subordinates, and they must also reciprocate by taking care of and nurturing their subordinates. Paternalism is the kind of generally well-known management style in Hong Kong (Westwood & Chan, 1992). Paternalism combines discipline and authority with fatherly concern and benevolence. The leader must show paternal qualities of care, concern, and protection of subordinates. Managers who are high on both initiating structure and consideration are effective.

Results of the Quantitative Study on Leadership in Hong Kong

The quantitative data on leadership attributes were collected from 171 middle-level managers in the telecommunications and financial services sectors. The sample characteristics are given in Table 25.1. All of the sample were ethnic Chinese working in local companies. The average age of the participants was 35.7 years old, ranging from 21 to 55. They had an average of 17.5 years of formal education. Sixty percent of the respondents were male and had an average of more than 14 years of full-time work experience and 10 years as a manager. The respondents had worked for their current employer for an average of 8 years. About half of the participants have worked for a multinational corporation and 18% of them belong to professional associations or networks. The average time that the respondents have lived in Hong Kong was 31.6 years and they have lived in two to three foreign countries for longer than a 1-year period.

The questionnaire aims to identify the characteristics and behaviors of a leader who is perceived to be outstanding. GLOBE defines a leader as a person who is able to motivate others and influence or facilitate in others behavior that contributes to the achievement and the success in a business organization. The questionnaire items consisted of behavioral and trait descriptors (e.g., autocratic, benevolent, nurturing, visionary). There were 112 attributes and behaviors to be rated on a 7-point Liekert scale that ranges from greatly inhibits (1) to contributes greatly (7) to making a person an outstanding leader. Based on the total GLOBE sample, a series of exploratory factor analyses and internal consistency analyses were conducted resulting in 21 leadership prototypicality dimensions. The Cronbach alphas of these scales range from .83 to .98 and within-group correlation range from .78 to .97. All scales demonstrated significant and nontrivial within-country response agreement, between-culture differences, and respectable interitem reliabilities (cf. House et al., 1999, 2004). The country scores together with the ranking of Hong Kong among the 61 countries on leadership prototypicality are presented in Table 25.4.

The implicit theory of leadership among Hong Kong managers favors behaviors and attitudes that include inspirational, performance orientation, decisive, visionary, team integrator, integrity, administrative competent, diplomatic, collaborative, self-sacrificial, and modesty. All the dimensions received a score above 5 on a 7-point scale. On the other end of the spectrum, procedural, autocratic, nonparticipative, self-centered, and malevolent are perceived as the least desirable characteristics of a leader. These attributes are viewed as ineffective or impediments to outstanding leadership. Procedural and face saving will slightly inhibit a person from being an outstanding leader and these attributes are seldom found in the media reports (see later discussion). The ranking of Hong Kong's scores among the 61 countries help to further refine the picture. On the one hand, malevolent, autocratic, nonparticipative, and self-centered attributes were perceived to inhibit a person from being an outstanding leader by Hong Kong managers. On the other hand, the rankings for Hong Kong relative to all 61 GLOBE countries are comparatively high. For example, self-centered scored 2.63, the lowest among all dimensions within Hong Kong, but it ranked high (9th) in comparison to all GLOBE countries. Or, malevolent scored 3.34, yet it ranked fourth among the 61 countries. This indicates that Hong Kong managers perceive these attributes to be less inhibitory to effective leadership than managers in most of the other GLOBE countries do.

TABLE 25.4
The Average Score and Ranking of GLOBE Leadership Scale for Hong Kong

	Hong Kong
Leadership Dimension	Mean	Rank
Charismatic Inspirational	5.85	48
Performance Orientation	5.82	48
Charismatic Visionary	5.76	51
Collaborative Team Oriented	5.76	40
Integrity	5.73	49
Administratively Competent	5.71	37
Diplomatic	5.60	23
Decisive	5.57	40
Team Integrator	5.28	45
Charismatic—Self-Sacrificial	5.13	21
Modesty	5.00	33
Humane	4.77	31
Autonomous	4.38	8
Conflict Inducer	4.34	15
Status-Consciousness	4.31	33
Procedural	3.83	36
Malevolent	3.34	4
Autocratic	3.27	5
Face Saver	3.14	21
Nonparticipative	3.02	13
Self-Centered	2.63	9

In contrast, Hong Kong managers perceive inspiration, performance orientation, visionary, and integrity to most strongly facilitate effective leadership in comparison to the other leadership dimensions. But the relative ranking of Hong Kong on these leadership attributes when compared to all 61 countries is relatively low. In particular, visionary and integrity are two of the vital characteristics of value-based leadership. In this respect, Hong Kong ranks only 51 and 49, respectively, in the GLOBE sample. Overall, these results seem to suggest that Hong Kong business leaders are not perceived very favorably compared with leaders in other countries included in the GLOBE study. However, this may be due to the fact that in Asian cultures, including Hong Kong, respondents tend to avoid the extreme ends of a scale and prefer the midrange responses (Adler, Campbell, & Laurent, 1989; Bond & Hwang, 1986; Hofstede, 1980). GLOBE controlled for response bias (House et al., 2004) and found that a substantial level of agreement existed between the “corrected” and “uncorrected” leadership scales (range of correlations: .85 to .99, average correlation: .94). This implies that cultural-response bias plays a small role in the GLOBE leadership scales.

TABLE 25.5
Second-Order Leadership Scales

Leadership Dimensions	Mean	Rank
Charismatic/Value-based:	5.68	47
Visionary, Inspirational, Self-sacrifice, Integrity, Decisive, and Performance orientation
Team Oriented:	5.58	50
Collaborative team orientation, Team integrator, Malevolent, Diplomatic Administratively competent, Diplomatic
Humane:	4.89	31
Humane orientation, Modesty Participative:	4.86	54
Autocratic, Nonparticipative (reverse scored)
Autonomous	4.38	7
Self-Protective:	3.67	18
Self-centered, Face saver, Status-consciousness, Procedural, Conflict inducer

Compared with China, Taiwan, and Singapore, the GLOBE data showed no significant difference in administrative competence and nonparticipative behavior among all four Chinese societies. Compared to the scores of other Chinese economies in the GLOBE study, Hong Kong leaders rank high in terms of autonomous and autocratic leadership attributes. Differentiating from their counterparts in other Chinese societies, Hong Kong people try to solve problems by themselves without seeking help from others. Seeking help from others means an obligation people owe to friends, with an expectation to return the favor in the future. The mentality of “to achieve self-renewal with one's own effort” is strongly held. Compared with other Chinese societies, Hong Kong scored lowest in relation to modesty, face saving, integrity, and administratively competent. On the surface, this profile appears to be consistent with the portraits of Hong Kong managers described in the literature. There were, however, some contradictory results in team-oriented leadership. People in Hong Kong are very individualistic. They show solidarity only to protect their own interests.

Based on the 21 primary leadership factors, the second-order factor analysis yielded six dimensions (House et al., 1999, 2004) which are presented in Table 25.5. Hong Kong leaders received the score of 5.66 and 6.58 for charismatic and team-oriented leadership, respectively. It implies that value-based leadership is complemented with collaborative team-oriented attributes. Humane and participative leadership received medium scores of 4.89 and 4.86, respectively. Only autonomous and self-protective scored below 4.5. Self-protective is the least desirable attribute for outstanding leaders, with a score of 3.67. More discussion of these factors is given as follows.

Charismatic/Value Based. Items loaded in this factor are visionary, inspirational, self-sacrificial, integrity, decisive, and performance. Hong Kong managers live through an increasingly uncertain environment; a clear vision is critical for leaders during the transitional period. They are inspirational, performance oriented, decisive, and visionary.

Team Oriented. Items include collaborative team orientation, team integrator, modesty, diplomatic, malevolent, and administratively competent. In a moderately collective society, dominant leaders form alliance to protect their interests. They also need the support from the masses. This is the only scale that showed no significant difference among the four Chinese economies. Hong Kong people seem to be very individualistic in the workplace. Yet they are very cohesive to their family and friends.

Humane Orientation. Consistent with the paternalistic style of management in the Chinese society, leaders show their command and authority together with the care and concern. Hong Kong ranked in the middle among the 61 countries in humane orientation and modesty. Hong Kong received the lowest score among the four Chinese communities on this dimension, possibly indicating that Hong Kong managers perceive personal care of the well-being of followers to be less important for effective leadership.

Participative. Hong Kong ranks 54th on this scale. Hong Kong managers perceive autocratic and nonparticipative attributes to inhibit effective leadership less strongly than most of the other managers in the GLOBE sample do. This can be confirmed in both the literature and the interviews (see later discussion). Participation is not necessarily effective in Hong Kong. Redding and Richardson (1986) found no apparent connection between participative attitudes and productivity in their study of Hong Kong managers. Empowerment is still not well accepted in Hong Kong because of the deep-rooted belief in the Confucian analects of filial piety and the unquestioning obedience expected from the subordinates. Leaders should be respected, obeyed, and not questioned.

Autonomous. Hong Kong ranks 7th with a score of 4.38 on autonomous leadership. The desire for autonomy and self-reliance in matters relating to work is very persistent in Hong Kong. This is consistent with the Hong Kong government's “positive nonintervention” policy. Hong Kong's success, compared with Asia's newly industrialized economies, Singapore, Taiwan, and Korea, to a large extent depends on the freedom and entrepreneurship spirit. In the case of economic downturn and rising unemployment situation, the typical response of the Hong Kong resident was not to press for government assistance or unemployment benefits. Instead, they were planning to upgrade their qualification and considering the possibility of starting their own businesses. It is apparently there is a burning desire for autonomy.

Self-Protective. Self-centered, face saver, status-consciousness, procedural (or bureaucratic), and conflict inducer were believed to slightly impede making a person an outstanding leader. Self-serving, greedy, and exploitative were seen as some of the negative attributes of leadership. Pursuit of one's own interest projects a negative image of selfishness.

Results of the Qualitative Studies on Leadership in Hong Kong

In addition to the quantitative survey results, the qualitative analysis yields rich information that is important to identify the culture-specific aspect of leadership behaviors. The following description is based on data that were collected from 30 branch managers and bank officers attending a part-time course from a large local bank. The participants were asked to select their preferred leaders and describe leader attributes and behaviors that enhance outstanding leader performance. An interview was conducted with a professor who taught the graduate-level leadership course. The interview lasted for an hour and the purpose was to identify the beliefs held about how leaders behave and what is expected of them. Secondary sources also include analysis of media coverage of leaders and biographies.

In the interview with a professor teaching the leadership course to Executive MBA participants, he supported the idea that:

Headship and ownership of Chinese entrepreneurs will affect the leadership style of Hong Kong managers. Their background and low mobility in the organization makes a difference. Unlike other large companies in the Western countries, the tenure of CEO is about five years; Chinese owners/managers stay in their organizations for life. The Hong Kong people are very pragmatic. They talk about vision, but only a few are able to put it into practice.

Characteristics and Behaviors of an Outstanding Leader. The findings based on the content analysis of the data collected from branch managers and bank officers regarding their perception of leader are listed in Table 25.6. The content analysis centered on the differences between outstanding leaders and effective managers. The most common description of an outstanding leader is charming, confident, and decisive, with foresight and strong gut feelings. Good communication, trust, reputation, and a desire to lead are considered important components of leadership. To be seen as an outstanding leader, respondents also indicate that charisma, providing a role model, and setting direction are important. Other items endorsed include risk taking, sacrifice, and long-term/future orientation. Effective managers are seen to be persistent, knowledgeable, sensitive, responsive, hard-working, and responsible. They are experienced, skillful enough to carry out the required work efficiently, and follow through on procedures. They rely on position power and authority but also try to maintain harmony. A consensus approach is preferred to an adversarial style.

Media Analysis on Public Image of Leaders. One way to understand leadership is through leadership image projected in the mass media. Media analysis was conducted on articles describing outstanding leaders as well as content analysis of recruitment advertisements for managerial and professional positions. An attempt was made to carry out an analysis of the media reports on leadership behavior in two time periods, 1 week in June 1997 (16th to 22nd) from the Ming Pao (one of the well-respected comprehensive daily Chinese newspapers) before the 1997 handover, and the first week in February (1st to 6th) 1998 (before the Chinese New Year) from the Hong Kong Economic Journal. During each time period, articles pertaining to leadership were content analyzed. In the first period, 82 articles were selected with 205 extracts. In the second period, 127 articles were identified with 347 extracts for further analysis.

In the first period, the major focus was on the change of leadership during the transitional period. On June 23, Time magazine identified the 25 most influential leaders from different sectors in the new Hong Kong. Though the leaders differ from each other in terms of social background, educational level, and professional qualifications, the public image from the media exhibits a common characteristic: high achievement motivation. Leaders are glorified for their ability to get rich and for being successful and results-oriented. A number of these successful business tycoons came from a humble background. They are very dedicated and hard-working. They deeply believe in maintaining credibility and trust in their working relationships.

The media analysis confirmed several of the themes identified through the discussion with bank managers. These features are relevant and, to some extent, consistent with some of the core dimensions of the GLOBE study. The effective leaders as portrayed in the media are summarized in Table 25.7. The media image of a leader is of a person with high achievement orientation and a strong desire for success. They continuously aim for the best. Similarly, administrative competence, experience, and expertise are highly valued. Some elements of the value-based leadership are also present. They may not be regarded as visionary leaders. However, they serve as a role model and lead by example. Operating under a competitive environment, outstanding leaders tend to develop a strategic orientation. They are forward looking, with accurate business judgment. The characteristics most frequently mentioned in the media reports are how leaders seize opportunities and become wealthy, followed by turning around a failing business. Hong Kong leaders are very opportunistic. Paternalistic leadership style is a common practice. Leaders are portrayed as benevolent and caring. They treat their longtime employees and business partners generously. Leaders are also seen as less autonomous and independent and are described as decisive and determined, with little evidence of participative and face saving. “Face” is important in the Chinese society. The importance of “face” to the Chinese is similar to the bark of the tree. But “face” has to be earned. When a person is successful, he or she will be given “face.” It is akin to honor and glory.

TABLE 25.6
Content Analysis Results of Narratives from Bank Managers and Officers

Category	Effective Managers	Outstanding Leaders
Skills	Communication	Interpersonal skills
	Strategy formulation	Attention to details
	Resolve conflict	Delegate
	Problem solver	Risking taking
	Blend of rights and duties	Emphasis on leading role
	Enabling process flexible	Aligning people
	Tactics	Autonomy
	Negotiate	Empowered
	Instruction	Human relations
	Express opinion	Consultative
	Involvement	Capture the opportunities
	Contingent reward	Articulate
	Compromise
	Flexible tactics
	Take precaution
Personality	Hard working	Charismatic
	Smart	Coach
	Loyal	Active
	Good temper	Intelligence
	Kind	Tremendous memory
	Considerate	Maturity
	Team	Role model
	Stable	Good exemplar
		Calm
		Sensitive
		Genius
		Open-minded
Abilities	Experience	Set direction
	Carry out required work	Shaping ideas
	Follow the rules, procedures, direction	New ideas
	Handling routine	Intuitive
	Operating efficiency	Enthusiastic
	Analytical	Independence
	Team work	Flexibility
	Task oriented	Darling and resolution
	Meeting deadline
	Completion schedules
	Execute the stated policy
	Closely monitor progress
Values	Responsible	Innovative
	Tolerate	Imaginative
	Goodwill	Long-term/future orientation
	Goals arise out of necessity rather than	Ideal
	desires	Objective
	Harmony	Responsive
	Accomplishment	Pervasive
	Persistence	Aggressive
	Tough-mindedness	Long-term goals
	Reputation	Heroism
	Good temper	Inspiring
	Balance Creative	Ambition Challenge
		Reputation
		Trust
		Devoted
		Achievement
		Drive
		Motivation
		Courage
		Respect
		Tough attitude
		Reputation
		Considerate
		Affectionate
Behaviors	Efficient	Sacrifice
	Productivity	Cooperative
	Coercive power	Team
	Appointed	Encouragement
	Involvement	Appreciate
	Assist	Strategic
	Coordinate	Influential
	Position power and authority

There are not many saint like historical heroes or leaders in the Hong Kong community. One can hardly find a local leadership figure in stamps, banknotes, or statues. However, there are more prevalent business leaders as indicated by an analysis of magazine articles from major periodicals. “Men of the Decade” were chosen for their contributions to Hong Kong by Hong Kong Business, a monthly magazine. Among them was Tung Chee-Hwa, the first chief executive of the Hong Kong SAR of China. Gordon Wu was chosen twice within 4 years for his visionary investment in infrastructure projects in China and Asia. Larry Yung, a red capitalist, stepped into the spotlight for his successful steering of the China-backed conglomerate, CITIC Pacific Ltd., within a short period. These men have proven themselves to be visionaries.

TABLE 25.7
Media Analysis on Public Image of Leaders

ADMINISTRATIVE COMPETENCE Expertise, competence, educated, talented, experience, global mind-set, professional knowledge, potential

CHARISMATIC/VALUE-BASED Confidence, long-term objective, long-term consideration, long-term planning, personal image, vision, favorable impression, dignity, charisma, value and expectation, role model, mission, ideal, influential, recognition, appraise, principle, standing out from the crowd INSPIRATIONAL Commitment, moral support, moral responsibility, assertive, ambitious, strong will, aggressive, political wisdom, courage INTEGRITY Justice, trustworthy, enthusiastic, fair, truth, honest upright, no prejudge, equal opportunity, credibility, frank PERFORMANCE ORIENTATION Reward outstanding performance, profit oriented, improvement, lesson learnt, try the best, merit, emphasis efficiency, contribution, distinguished achievement, management objectives HUMANE ORIENTATION Help employees, fighting for right and benefits, friendly, social contract, talkative, sociable, approacable, help the less fortunate, easy to get along with, compassionate, attention to the needs of employees, considerate, generous, supportive, contact, understanding, expressive, humble, sense of humor TEAM ORIENTATION Coalition, partnership, collaborate and support, coordination, cooperative, harmony, support from the mass, resolve the differences, consultative rather than fighting/struggling, daring and resolution, communication, public opinion PARTICIPATIVE Consult, delegation, consensus, democratic, autocratic, develop talent, constructive suggestion AUTONOMUS Independent, independent assessment, empower, freedom, remain mutual, mutual respect, cool-minded, calm

NARCISSISTIC (SELF-PROTECTIVE) Self-discipline, avoid conflict, role conflict, preaches what he says, authority, arouse emotional conflict, sacrifice, power, self-restraint, status, self-interest, isolated, strong personality, show extreme forbearance, control emotional/feeling DECISIVE Solve problem, objectivity, determined, reasonable, clear message, investigate, viewpoint, rational, prepared, detailed investigation, logical, information dissemination, listen to opinion, criticism, persistence, open-minded, carefully conceived, well thought, broad-minded, seek true from fact, judgment, handling the dilemma, stand firm STRATEGIC ORIENTATION Advantage, adaptive, flexible, capture the opportunity, competitive, innovative, risk taking, future oriented, invention, curiosity, handling crisis, conservative, optimistic, goals, legal principles, turn threat into opportunity, correct judgment DUTY AND RESPONSIBILITY Responsible, resourceful, provide resources, cautious, devoted to one's duty, how perilous it is, duty-bound, no passing the buck, intervention, innovative operative concepts, down to earth, know one's place, take protective measure in advance, attention to details, face the consequence, practical, correct, action oriented, monitor, admit mistake, passive, play politic, successor, stress on traditional culture, selfless, appeal for higher authority, tolerate, workaholic, active, pragmatic, simplicity, simply life, try the best, stress, worry, coercive, uneasy PROCEDURAL Rule of law, rigorous, monitoring mechanism, follow the rules and regulations, manipulation, order and procedure

Mr. Tung Chee-hwa, a former shipping magnate and the first chief executive of Hong Kong SAR, is now serving his second term in office, running until 2007. He was born in Shanghai, raised in Hong Kong, educated in Britain, and trained in the United States. Throughout his career he has gained the trust of the Chinese authorities. Evidence of this was shown when Tung's failing business was bailed out by China in the early 1980s. Intensely patriotic and instinctively conservative, he was very reluctant to take the position of chief executive. He did so out of a sense of patriotism and responsibility rather than ambition. Mr. Tung was portrayed as a puppet of Beijing by the foreign media. His background in business seems to have left him ill-equipped to meet the demands of modern politics, especially in handling the media as indicated by his deteriorating popularity (ratings fell from 89% in October 1997 to 56% in August 1998). Steven Vines, former foreign correspondent for the Independent and founding editor of the Eastern Express, described the new chief executive hand-picked by China in this way:

Tung Chee-hwa embodies almost everything the new sovereign power expects of a leader. He is conservative and cautious. He shares the views of China's leaders about the need to preserve order. He is suspicious of representative government. He is instinctively authoritarian and he is intensively patriotic. Unlike most senior cadres in Peking, he is also rather affable and has a knack of not making personal enemies. (Vines, 1998, p. 77)

Tung Chee-hwa outlined his vision when addressing the people of Hong Kong on the first day of Chinese rule: “I see an economy that is one of the most important in the world. Hong Kong will be the most important trade, transportation, communication, education and entertainment center in Asia.” Hoping that to inspire the trust and confidence of the community, the slogan, “Government cares about the people,” revealed his typical paternalistic style of leadership.

During his 5 years in office, Mr. Tung did not show strong leadership. Property prices fell 65%; the stock market lost more than one third of its value; unemployment soared; and there was a record high budget deficit. There was no relief for the growing number of unemployment. The performance of the government was not inspiring and the people's trust in the government has been declining. The dramatic changes in Hong Kong's economy began to reverberate throughout the society. In June 1998, 1 year after the turnover, Hong Kong saw a steady economic decline. Satisfaction with life in Hong Kong had plummeted to a record low never seen in the 1990s (Hong Kong Transition Project, 1999, 2002).

Tung was reelected by an electoral committee made up of China's supporters in spite of his unpopularity. He initiated some changes to improve the government's accountability to the public. The ministerial system was introduced to replace top civil servants. In his policy address for his second term, the main theme was “revitalizing our economy” through economic restructuring, forging closer economic co-operation with the mainland, and eliminating the fiscal deficit. But his policy address did not bolster the confidence of Hong Kong's citizens. The opinion survey conducted by the University of Hong Kong revealed that half of the respondents were not satisfied with the policy address. The approval rating for the chief executive dropped to a record low of 46.9 points out of 100. The disappointment was partly due to the lack of initiatives of the new team of ministers.

Leaders are viewed as heroes who come forward at a time of crisis to resolve a problem. With the lack of confidence in the chief executive and his administration, Hong Kong's world-class civil service could be ruined by the poor performance in handling the posthandover crisis. This may reflect a general downplay of leadership quality in the public sector due to premature promotion during the transitional period and the team-based orientation. This has created a tendency to devalue the perception of leaders.

In the business circle, Li Ka-shing, nicknamed “superman,” represents the new generation of Chinese taipans, coming from a rice field in China and ending up as Hong Kong's richest man. He has a slice of virtually every profitable pie in Hong Kong. Li is among the global power elite and ranked the world's wealthiest person by Forbes magazine. His net worth was estimated to be $11 billion (Tanzer, 1997). He began by making plastic flowers for a living and now controls property, utilities, retailing, telecommunications, and infrastructure companies. In 1979, he acquired a controlling stake and became the first Chinese to win control of a large British trading conglomerate, Hutchison Whampoa. He is the most admired and influential person in Hong Kong and Asiaweek (May 2000) ranked him as the most powerful person in Asia.

Li Ka-shing is also very successful in grooming his two sons, Victor and Richard, for the new generation of high-flying Hong Kong entrepreneurs. The elder son, awarded young leader of the year 1997, is the successor of the family's flagship Cheung Kong (Holdings) and the younger son, Richard, is also a rising star in the corporate world. Richard, at the age of 30, was the deputy chairman of Hutchison Whampoa, a company capitalized at $270.2 billion, the second-largest company in Hong Kong. In 1990, he founded Star TV, Asia's first pan-Asia satellite television network operating in more than 50 countries across the continent. Subsequently it was sold to Rupert Murdoch at approximately six times what was invested in it. Richard, currently CEO and chairman of Pacific Century Cyberworks, built his company by taking over the formerly British-controlled Cable and Wireless Hong Kong Telecom.

Gordon Wu is a different type of entrepreneur with a vision of constructing the largest and most significant infrastructure for the development of China. Often referred to as a visionary, he is prone to dreaming big dreams. After graduating from Princeton University in 1958, he returned to Hong Kong to start his career. His company, Hopewell, was set up in 1969. After a decade of dealing with eight governments, problems with the ministers of transport, and cancellation of mass transit in Thailand, Sir Gordon still thinks about Hopewell's vigorous infrastructure plans in the Pearl River Delta.

Beijing has been cultivating numerous pro-China leaders with the new elite group embracing a pro-Beijing, patriotic view. Larry Yung is the founder and chairman of CITIC Pacific, the Hong Kong–listed subsidiary of China's premier state-owned investment conglomerate. It is China's most powerful conglomerate in Hong Kong and its empire spans property, aviation, telecommunications, and civil works. Larry, son of PRC Vice President Rong Yiren, has already established himself into the traditional power elite by becoming a steward of the Hong Kong Jockey Club. He helped raise China's equity stake in major Hong Kong institutions such as Swire Group's Cathay Pacific Airways and the electric power utility China Light and Power.

In Hong Kong, political leaders are often found in comic strips that are prohibited in Singapore and China. The majority of the people remains largely apolitical due to there being no strong and powerful leader on the political scene. Political leadership refers to those individuals who either directly or indirectly exercise influence and/or control over the process of governmental decision making. In Hong Kong, the process of decolonization is complicated by the fact that the state is to be reverted back to a communist system that is fundamentally incompatible with its capitalist system. Political leaders have to accommodate the conflicting claims and pressure from Hong Kong, China, and Britain in the transition to 1997. During the transition period, an atmosphere of uneasiness and mutual skepticism and distrust overshadowed the relationship between Hong Kong and China. Every Chinese policy on Hong Kong was seen as an attempt to exercise greater control over the territory. Any consensus reached between Britain and China was seen as a British betrayal of Hong Kong's interests. Beijing saw some of the political leaders as confrontational and radical. Since the return of Hong Kong to China, public demonstrations are part of the daily life in Hong Kong. China worried that Hong Kong would be potentially become subversively anti-China. The Article 23 (the proposed national security law to legislate against subversion) controversy will undermine the confidence in Hong Kong if the issue is mishandled.

The introduction of electoral politics had a significant impact on the evolving political leadership in Hong Kong. The Democratic Party and grassroots leaders were introduced into the Legislation Council. They would fight for Hong Kong's interests and occasionally condemn the autocracy of the Chinese leadership. However, the dominance of the elite was continued through political appointment. The leadership style of the Chinese officials was very imposing and dominating. After the handover, the pro-China figures enjoyed better access to and acceptance by the Chinese officials.

In Hong Kong, the Leader of the Year is elected annually by a group of prominent judges. The Hong Kong Standard (a local English newspaper) printed an eight-page special on the event. The profile of the award winner will shed some light into the characteristics of an outstanding leader. Victor Fung was honored Leader of the Year 1999 by a panel of nine judges. Dr. Fung was Chairman of the Hong Kong Trade Development Council, the statutory body responsible for the promotion of Hong Kong's external trade and member of Hong Kong SAR Chief Executive's Commission on Strategic Development. Currently he chairs the Airport Authority Management Board. He wears many hats in public positions. Born and raised in Hong Kong, Dr. Fung holds bachelor's and master's degrees in electronic engineering from the Massachusetts Institute of Technology and a doctorate in business economics from Harvard University. He was a professor at Harvard Business School before returning to Hong Kong. Victor is the chairman of the Li and Fung Group, a leading Hong Kong–based regional trading company. In 1995, Dr. Fung was voted businessman of the year under the Hong Kong Business Awards Scheme for his success as an entrepreneur and for his contribution to Hong Kong's economic development. He is one of the most influential people in Hong Kong. He has featured in more than 200 media interviews. The criteria for being elected include reaching out to society, contribution to society's well-being, not just in his own discipline, having a compassion and empathy, and voluntarily contributing time, effort and money for the well-being and betterment of Hong Kong society. Dr. Lawrence Wong, chairman of the panel of judges, described Dr. Fung as an “achiever [who] points [the] way with compassion.” He gave further comments on being a leader:

A leader is a little like a priest, an evangelist. You have to preach, you have to convince your people. … The most important quality of a leader is the ability to manage change. … A good leader must have vision so he can lead the organization to respond and adapt to external change. … You have to be a coach, on top of that you have to be cheerleader and sometimes you have to be a little bit of a godfather. (Leader of the Year, 1999).

Media analysis also included an analysis across 63 pages of the Classified Post, a total of 1,127 recruitment advertisements in the South China Morning Post (a highly regarded English newspaper in Hong Kong and the region) on March 6, 1996 (a peak recruitment season of the year). The content analysis of recruitment advertisements for managerial or professional positions provides the attributes of the person they are seeking. The qualifications and attributes required for senior management are summarized in Table 25.8. It can be seen that in addition to educational qualifications, technical skills, and relevant experience, interpersonal skills, communication, and personal attributes, such as energetic, motivated, dedicated and confidence, are also considered important.

Overall Profile of Leadership in Hong Kong

The leadership profile emerges from the quantitative and qualitative data emphasizes on results, decisiveness, and competence. Through aspiration and vision are important, Hong Kong leaders are rather pragmatic, focusing more on results and performance. They place high traditional values on the virtue of being industrious as well as being frugal (England, 1989, p. 40). In a materialistic and social class–conscious society, leaders are glorified for the ability to get rich and be successful. There is strong desire for success. Business leaders are very opportunistic and seize every opportunity to become affluent. They are the wealthiest and the most powerful people within society.

With wide exposure to Western culture, Hong Kong Chinese remain Sino-centric, regarding themselves as modern without losing their “Chineseness” (Bond & King, 1985). Indigenous leadership styles and work values include relationships, harmony, order, and discipline. As a group, the Chinese are higher than Western groups on various measures of authoritarianism (Bond, 1991). Several empirical studies have shown that Chinese also scored higher on power stratification when compared with the United States (Cragin, 1986; Ralston, Gustafson,

TABLE 25.8
Qualifications and Attributes in Recruitment Ads

•  Professional qualifications •  Degree holder of reputable university, MBA •  Work experience •  High level of commercial awareness •  Forward thinking •  High proficiency in English, Mandarin, and Cantonese •  Good communication and analytical skills •  Cross-cultural sensitivity •  Extensive travel within the Greater China region •  Knowledge in PC, computer software •  Familiar with Internet and IT, Web- and media-related experience •  Ability to critically evaluate issues and solve problems •  Ability to organize and lead •  Ability to work in fast-paced and busy environment •  Ability to develop strong customer relationships •  Commitment to working with team, good team player •  Excellent interpersonal skills •  Hard working •  Driven, result-oriented, and strategically minded •  Highly energetic •  Motivated individual •  Mature, dynamic, proactive, business oriented, confidence •  Independent •  Reliable and dedicated, cool, calm under pressure, meeting deadline •  Positive and pleasant personality •  Creative, innovative •  Ideas people, a lot of initiative, energy, patience, and tolerance

Terpstra, et al., 1993b). The leadership style is substantially influenced by Confucian values on order and compliance and acceptance of authority, resulting in a predominantly autocratic manner. High power distance creates hierarchical structure, conformance, and dependence. Subordinates have little discretion and initiative and are seldom consulted before decisions are made. They simply obey their leaders without questioning. Managers are reluctant to share information with subordinates and are averse to a participative system. In a relationship-oriented society, leaders need to maintain harmony, order, and discipline. In addition, leaders are expected to be sensitive to the needs of subordinates and uphold a high moral standard.

To summarize, leadership style appears to be culture specific. The predominant leadership style is paternalistic and benevolent autocratic. Leaders are expected to be nurturing, considerate, and sympathetic in exchange for unquestioning loyalty, dedication, and compliance from subordinates.

6.  MANIFESTATIONS OF LEADERSHIP AND CULTURE IN HONG KONG

The Chinese society is governed by guanxi. The guanxi relational network is defined by “five cardinal relationships,” or in Chinese wu-lun, that is, master–servant, father–son, husband–wife, elder–young siblings, and friends–friends. These five relationships give order and stability to the social system and offer the role-context requirements for individuals in the five fundamental relationships of life. It ties people together according the specific relationship between people. The unique Chinese culture on the preset fundamental relationships determines the order of social hierarchy. Wu-lun and guanxi networks can be used to explain these societal dimensions of Collectivism, Gender Egalitarianism, and Power Distance.

Family occupies the central position within the nested guanxi relationships. Such relationships will be extended to distant relatives, friends, and new acquaintances. Chinese are expected to have different role obligations within the network in comparison to close and distant guanxi networks. Guanxi defines who is a member of the close inner circle and who is a member of distant outside groups. This is analogous to the in-group and out-group differentiation in the social-psychological literature. That is why family cohesiveness remains important.

Hong Kong people seem to be very individualistic in the workplace and society, yet family solidarity is strong. The collectivism in the Chinese culture is actually family network group–specific. In the Chinese society, developing a close parent–child relationship is a virtue that is widely respected and valued. Children are taught to be obedient, conforming, and dependent. They are often reminded of the bounded filial duty toward their parents. There are close bonds, loyalties, and a strong sense of duty associated with the family network.

Family business orientation remains strong in Hong Kong. Owners-managers thrive on being involved in every aspect of their business. A leader has the authority to rule and lead the organization as well as the responsibility to provide and protect (Bond, 1991). Leaders need to show their command and authority as well as their caring and consideration. This is a typical paternalistic or benevolent authoritative style. The Chinese style of leadership tends to exert tight control as the owner of the organization has absolute power. The authority figure should not be challenged. There is little discussion on empowerment and decentralization in the media. In such a highly personal management, ability to inspire is less important. In a typical Chinese family business, the inner circle of the top-management team is reserved for family members only. The owner-manager will prepare and arrange for the next generation to be the successors. There is less concern about developing subordinates and potential successors outside the family members.

Hong Kong people are pragmatic enough to preserve the virtue of Chinese values and at the same time absorb the knowledge and experience of the West. The deep-rooted Confucian values, such as humility, patience, and persistence, still guide individual actions and attitudes. The Confucian values emphasize modest, humble, and harmonious relationships. The notions of “face” and mutual respect also constrain the behavior of Chinese individuals and discourage them from being assertive. Respect for hierarchy also creates social-class consciousness. Wealth is considered as an important criterion to determining one's social status. In comparison, Hong Kong people are more materialistic. Leaders make accurate business judgment by capturing every opportunity to create wealth. They are glorified for their ability to get rich.

High levels of work motivation exhibited by the Chinese as a group have been explained by culture-based work values and strongly held cultural traditions and beliefs tied to Confucianism such as working hard, self-control, frugality, and willingness to adapt (Chinese Culture Connection, 1987). In work organizations, individual contributions are rewarded. Individuals work hard to achieve personal success, however individual achievement was only encouraged if it would not harm others and would lead to group success (A. B. Yu, 1996). Hong Kong people maintain a strong work ethic as a result of the cultural heritage of working hard, dedication, and uncritical abdication of responsibility to higher authority. Thus employees in general suffer and work under stress from their demanding bosses.

Implications for Foreign Managers Doing Business in Hong Kong

Hong Kong, as a gateway to China, provides great opportunities for multinational business. The findings in this study offer some important implications for foreign managers doing business in Hong Kong or dealing with managers from Hong Kong. For multinational firms, it is necessary to pay more attention to the cultural differences and the unique leadership characteristics. As Project GLOBE (House et al., 1999) has pinpointed, multinational firms need to pay attention not only to basic cultural differences between their home country and the host country, but also to the subcultural differences between different societies that share the same language, religion, and ethnic traditions, and leadership styles (e.g., China, Hong Kong, Singapore, and Taiwan). Even for an ethnic Chinese manager, it is still necessary to understand the cultural difference in other Chinese societies. Hong Kong managers behave differently than their counterparts in China and Taiwan. An effective leadership style from one Chinese society may not be effective or even applicable to other Chinese societies. This has special implications for multinational companies in managing their global workforce. Developing cultural awareness and sensitivity is an important starting point. Globalization and standardization may be a cost-effective way to handle global business, however the universal approach in applying headquarter policies to foreign subsidiaries is not necessary the best way to do business. Cultural differences should be taken into consideration. Paying attention to cultural differences and the unique leadership perceptions by detailed investigation of the determinants for managing in a global context can pay dividends. Research findings support the idea that local differences should be contextualized rather than minimized (N. Wong, 2000). Knowledge of global, regional, and subcultural differences enables practitioners to formulate their human resources (HR) policies and strategies accordingly. In addition to technical knowledge, soft skills such as relational/interpersonal skills are important in the relationship-oriented Chinese society.

Another implication is preparation for international assignments such as selecting and training expatriates and developing skills in coping with the growing need for global management. It helps international assignees adapt to a new and different environment outside their country. Expatriates should be aware of the cultural differences and develop skills in handling employees and customer needs more effectively. Without understanding the national culture, multinational firms may make mistakes in selecting and training their staff, in marketing and promoting their products, or in making short-term and long-term investments. The costs of sending expatriates overseas are very high both directly (salary and allowances) and indirectly (damaged reputation, career prospects, relationship with clients, etc.). Thus becoming familiar with local culture and leadership behavior is critical in selecting local partners, locating and retaining staff, as well as establishing HR policies and practices.

Hong Kong is playing a vital role in the international arena; however, the traditional Chinese family business features, like cronyism and nepotism, which coexist with international business practices, may have been difficult for some Westerners to understand. Chinese family business is rooted in Chinese values, and has a strong sense of Chinese tradition. The traditional Chinese view tends to treat employees as family members. Employers expect loyalty from employees and reward their diligence. It is not a good practice to retrench an employee. If one doesn't succeed, it is not necessary to get rid of him or her right away. The person will be given a chance to move around if poor results are a consequence of something other than their efforts.

Harmony is crucial in societal and corporate culture. This can be achieved by avoiding extreme behavior. Situations such as direct confrontation that could lead to loss of “face” or shame should be avoided. Western managerial techniques that are built heavily on individualistic assumptions may not be effective. Aggressive bargaining is not practiced in a collective and high–power distance society. Employees are not supposed to challenge the decisions on compensation and leaders will assure workers they can get what they are promised in exchange for their loyalty and efforts. Contingent reward seems to be a very powerful tool to motivate subordinates. Hong Kong business leaders are more transactional and this tends to be instrumental.

All in all, multinational corporate managers doing business in Hong Kong need to be aware of the effectiveness of managerial practices that are embedded in different institutional contexts, and take into account those specific cultural dimensions that are manifested in Hong Kong. The present study provides managers in international business some universal valid behaviors as well as allowances for comparison and contrast in culture-specific behaviors.

Limitations and Future Research Directions

The present study utilizes both quantitative comparative and qualitative culture-specific measures to draw an altogether richer picture of Hong Kong's societal, organizational, and leadership culture. Triangulation research methods from multiple sources of data such as questionnaire surveys, interview, media analysis, and archival data were used to cross-validate the research findings. The quantitative data were interpreted with qualitative data. No matter how vigorous the research design is, limitations are unavoidable. Some limitations of the present study and possible directions for future research are suggested.

The sample was restricted to middle managers from the telecommunications and financial services sectors and this limits the generalizability of the findings. These two industries are the most important business sectors in the Hong Kong economy. Generalizing the results to other industries should be approached with caution. As such, future research should include respondents from different industries and economic sectors to extend the generalizability of the results.

This study suggests many avenues and promising directions for future research. Longitudinal studies and more in-depth case analyses are needed to provide insight into how outstanding leaders respond to environmental changes. Equally important, the present study focuses on the embedded cultural environment and its impact on leadership behaviors. Future research could investigate the causal relationships on antecedents, leadership behaviors, and performance measures.

7.  CONCLUSIONS

The present study identified the effects of societal and organizational culture on leadership behaviors and practices in Hong Kong. The findings of the GLOBE study presented in this chapter reflect the changes in societal culture and leadership during the last decade, particularly after Hong Kong was returned to China. The leadership behaviors that emerge from the quantitative data are consistent with the qualitative study and the cultural dimensions.

Consistent with the universally endorsed leadership attributes, the GLOBE results for leadership dimensions in Hong Kong indicated that effective leaders were seen to be inspirational, of high integrity and vision, as well as being decisive and performance oriented. These were considered crucial factors for success of an outstanding leader.

A few key exceptional leadership elements include being hard-working, results-oriented, and highly adaptive. In general, outstanding leaders are expected to be the role model, have high moral standards, have integrity, and maintain good interpersonal relations. In addition, demonstrated competences to solve critical problems, plan, and communicate are of vital importance. The Confucian values, to coincide with the culturally endorsed leader attributes, place great emphasis on integrity, dependability, trustworthiness, and honesty.

In a high–power distance environment, leaders can carry out positive actions for the entire organization more easily and generally receive fewer challenges. Major decisions are made and carried out in a top-down manner. Charisma is considered as the respect subordinates have for their leaders, who have the power and authority to allocate resources at their own will. Contingent reward is explicit in Hong Kong, and in this respect it is necessary to provide appropriate rewards and incentives for the desirable outcomes. As such, Hong Kong managers are perceived to be more transactional than transformational.

Hong Kong people are pragmatic and realistic. The ability to earn money and create wealth is very important. They hold a down-to-earth view of leadership that concerns performance rather than charisma and responsibility, not just privilege. To this end, there is a strong belief in maintaining harmony. The virtues described in biographies on leadership characteristics, such as courage, authenticity, integrity, vision, passion, conviction, and competence, are not necessarily found in real situations. Leaders can be unwilling to listen to or share information with others, and lead by using power, manipulation, and coercion. Seldom do they inspire trust and confidence in their followers, who in turn are encouraged to serve, sacrifice, and comply. Empowerment and granting ample authority to their subordinates is not very likely to happen in Hong Kong organizations. Employees expect to be treated with dignity and respect, and to participate only in decisions that affect their work life.

Hong Kong is an ideal place where the Western system had been successfully transplanted to Chinese society. Hong Kong people are more individualistic than the other three Chinese societies studied in GLOBE. The Chinese society pays attention to education and knowledge and wisdom are regarded as important virtues. The new generation of leaders are better educated with many of them receiving their education in Western countries. Their management styles represent a blend of Confucian and Western philosophy. They are willing to expend a portion of their effort toward work- or career-oriented activities and improve the individual well-being by enlarging one's personal resources, for example, social ties, education, and professional qualifications. This type of orientation will serve to enhance the career- or work-oriented performance of the Hong Kong Chinese.

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Appendix

Overview of Financial and
Telecommunications Industries

The two industries included in this project were telecommunications and financial services. Both these industries play a vital role in the Hong Kong economy. The financial sector is the single largest sector and telecommunications is one of the fast-growing sectors in Hong Kong.

In 2000, financing, insurance, real estate and business services contributed 23.2%, the second-largest contribution to the gross domestic product (GDP). The share of transport, storage, and communications in the GDP was 10.3%. Regarding the contribution to total employment, the service sector as a whole accounted for about 79% in 2000. Within this total, financing, insurance, real estate, and business services accounted for 13%, whereas transport, storage, and communications accounted for 11.3% (Department of Census and Statistics, Hong Kong Government, 2000).

Telecommunications Industry

Hong Kong has a world-class telecommunications infrastructure that is an important factor in Hong Kong's success as a leading business and financial center. The infrastructure comprises fixed-line telephone companies, mobile-phone services, paging operators, and over 170 value-added service providers offering a wide range of services including facsimile, data communication, Internet access, and so on. Hong Kong serves as Asia's telecommunications hub. Hong Kong is among the world's top-ranked in terms of using video cameras, mobile phones, and the Internet. Hong Kong maintains the highest telecommunications penetration and usage rates in the world as is evident by the portable phone–toting executives conducting business while they eat, drive, and walk. Hong Kong has one of the most modern telecommunications systems in the world.

Since 1925, domestic telephone services in Hong Kong have been provided exclusively by Hong Kong Telephone Co., Ltd. Its franchise expired in 1995. Cable Wireless (Hong Kong) Ltd. has had the exclusive right to handle Hong Kong's international communications services since 1981. The government's policy on telecommunications is to encourage the competitive provision of telecommunications services. Competition is viewed as a mechanism that fosters economic and efficient supply of services and that disciplines supplier behavior such that prices to consumers are fair and reasonable (Office of the Telecommunications Authority, 1997/1998). In order to satisfy demands within the telecommunications industry for greater participation, the industry was deregulated. The deregulation of the telecommunications industry has progressed steadily, with the result of increasing level of competition in the market. Increased competition in telecom forces prices down.

One half of the Hong Kong households installed a PC at home. The penetration of the Internet at home was 73.3% (Department of Census and Statistics, Hong Kong Government, 2003), one of the highest Internet household penetration rates in Asia. Thirty-one percent of

Hong Kong's population has used the Internet to access government information (Saranow, 2001). It leads the rest of Asia in using Internet for accessing information but not for doing business like online transactions. The prevalent use of e-government services is due to the territory's high Internet usage and educated population.

Finance Industry

Hong Kong has emerged as an important international banking and financial center. Eighty-five of the world's top 100 banks are present in Hong Kong. The 6,957 financial institutions employed a total of 127,012 employees (Department of Census and Statistics, Hong Kong Government, 1999). The banking industry in Hong Kong is operating under fierce competition. As a snapshot of the competitive environment, there are 367 authorized financial institutions with 1,485 branches in a small city-state with 6.8 million people. As of April 1998, there were 177 banks; 31 are locally incorporated and the rest are incorporated outside Hong Kong. Hong Kong is thus an important regional financial center. The stock market capitalization ranked 7 in the world, with U.S.$7,449.4 billion. According to the International Institute for Management Development's world competitiveness report (2000), access to local capital market and availability of capital market ranked number two in the world.